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Market Recap: Pending Home Sales Jump, Home Prices, Construction Spending Declines

Posted On July 03, 2020

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Mortgage rates continue to trend lower, touching the lowest levels in the past two months.  Pending home sales soared after a record decline the previous month.  The S&P CoreLogic Case-Shiller home price index showed home price appreciation is sustained.  US construction spending declined again.

The pending home sales index rebounded in May, up 44.3% month-over-month.  The figure was the largest reported increase since the National Association of Realtors (NAR) started the index in 2001.  Annually, however, the index was down 5.1%.  NAR chief economist Lawrence Yun commented, “this has been a spectacular recovery for contract signings […]  This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”

The Case-Shiller home price index appreciated in April up 0.3% month-over-month and 4.0% year-over-year.  Phoenix led the 20-city index, up 8.8% annually, followed by Seattle up 7.3% annually and Minneapolis up 6.4% annually.  Home price appreciation has not been significantly impacted by the COVID-19 pandemic.  Buyer demand is still strong, and inventory is still low, so home price appreciation is sustained. 

US construction spending declined 2.1% month-over-month in May to a seasonally adjusted annual rate of $1.36 trillion.  Residential construction fell 3.9% month-over-month but spending on public projects increased 1.2%.  The data lags by one month.

Record low mortgage rates could mean a busy summer for home buyers.  If you’re looking to buy a home, be prepared for a competitive market.  The earlier you talk about mortgage financing the better.  We’re standing by to assist with any new purchase or refinance needs.

 

Sources: Econoday, MarketWatch, MarketWatch, MarketWatch, MarketWatch, Mortgage News Daily